How Can I Protect My Assets From Medicaid In Indiana?

If you or a loved one needs long-term care Medicaid benefits in Indiana, you’ll need to know Indiana’s Medicaid eligibility requirements. Medicaid in Indiana can pay your long-term care costs if you don’t have long-term care insurance and cannot afford to pay privately. However, you must comply with strict income and asset limits to qualify. As Medicaid is a needs-based system, only certain applicants get approved.

If you exceed Medicaid’s asset limits, you need to spend down and potentially deplete most of your assets to qualify. If you transfer or give away your assets before applying, you might be penalized and ineligible for benefits. Because of this, satisfying Medicaid’s asset limits requires careful planning and consideration. Read on to learn more about long-term care Medicaid asset limits, including what you can do to protect your assets and still receive benefits.

What Are The Asset Limits For Nursing Home Medicaid In Indiana?

For Medicaid to cover the costs of your nursing home level of care (e.g. care in a nursing home, at home, or in the community), your assets cannot exceed the state’s asset limits. Specifically, the 2022 asset limit (known as the resource limit) is $2,000 if you are single. If you are married, the spouse applying for Medicaid can keep $2,000, and the nonapplicant spouse can keep up to $137,400 – the community spouse resource allowance (CSRA). If both you and your spouse apply, then the combined asset limit for you and your spouse is $3,000.

Medicaid considers some of your assets to count against your eligibility and other assets to be exempt (noncountable). For example, the cash in your checking account is a countable asset. However, your home could be an exempt asset if you are expected to return home or your:

Spouse lives at home,
Child under 18 lives at home, or
Blind or disabled child lives at home.

So, you could become eligible for Medicaid by having more than the state resource limits because some of your resources are exempt. But you should speak with a Medicaid planning attorney about your situation to be sure.

Can You Hide Assets From Medicaid?

The only way you can legally hide assets from Medicaid is to execute transfers of those assets before Medicaid’s lookback period. Medicaid does not review your financial transactions that occur more than five years before applying. Intentionally failing to disclose assets or asset transfers made within the lookback period is a crime known as Medicaid fraud that is usually a felony punishable by a fine and possible imprisonment.

How Does Medicaid Know What Your Assets Are?

When you apply for Medicaid, you’ll have to disclose the types and values of your assets, including cash, checking accounts, savings accounts, trust funds, individual retirement accounts, and more. Medicaid reviews the last five years of your asset and income records to determine if you gave away assets or transferred them for less than they were worth. Medicaid can require copies of tax returns and account statements for this five-year period. Increasingly, follow-up questions about Indiana Medicaid applications show signs that the state is using advanced investigation technology to find unreported assets and income.

Can Medicaid Take Your Assets?

If you received Medicaid benefits in Indiana after the age of 55, then after you die, the state can potentially take some of your assets to offset the cost of benefits that Medicaid covered. Taking your assets is more commonly referred to as estate recovery, and it is required by state and federal law. Your estate consists of assets, including personal property and real property, that you own at your death. Assets could include your home, farmland, money remaining in your bank account or nursing home account, money held in your qualified income trust (Miller Trust), and assets in a revocable trust, and whole life or universal life insurance policies with cash surrender values.

However, some of your assets might not be reachable by the state, including:

Property that transferred to an irrevocable trust more than five years before applying
Personal effects
Life insurance proceeds that are paid to your beneficiaries
Assets that are provided to your surviving spouse, a child under 21 years old, or a child who is blind or disabled

Moreover, if you are a married Medicaid recipient and your spouse survives you, the state will not seek recovery until after your spouse’s death. However, Indiana law prohibits estate recovery against the community spouse’s assets after their death.

What Is Medicaid Asset Protection?

Medicaid asset protection includes:

planned advance asset transfers,
exempt asset investment planning, and
planning to minimize as that exposure to Medicaid estate recovery.

Through the help of a skilled elder law attorney, you could plan for Medicaid years in advance to avoid issues with Medicaid’s asset limits and lookback period.

Suppose more than five years before seeking Medicaid benefits, you transfer some of your assets into an irrevocable trust commonly known as a Medicaid Asset Protection Trust (MAPT). In this case, the trust holds assets for the benefit of your loved ones and is tailored to serve your unique interests and concerns relating to your beneficiaries. This type of trust could even provide you income. However, losing access to the trust’s principal is essential for the trust not to be determined by Medicaid as one of your assets when you apply.

Even if you need Medicaid benefits sooner than five years from now, a skilled attorney can help you protect some of your assets, so Medicaid planning is still worth pursuing.

Medicaid Lawyer In Indiana

To learn more about protecting your assets in anticipation of Medicaid, you should consult with a Medicaid planning attorney. You can also find more information about Indiana Medicaid planning in these and other Hawkins Elder Law Blog articles:

About The Authors

Jeff R. Hawkins and Jennifer J. Hawkins co-author this blog with Thomas E. Hynes, a lawyer admitted to practice in Pennsylvania, New Jersey and Florida who has a background in estate planning and elder law. Jeff and Jennifer are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers. They are also active members of the Indiana State Bar Association and the Indiana Chapter of the National Academy of Elder Law Attorneys (NAELA). Jeff is also a member of the Illinois NAELA Chapter.

Both Hawkins are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois.

Jeff is a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation. He is also a member of the Illinois State Bar Association and he served as the 2014-15 President of the Indiana State Bar Association.

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